RLGT - Earnings call transcript Q3 2019

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Operator

Greetings, and welcome to the Radiant Logistics conference call. This afternoon, Bohn Crain, Radiant Logistics' Founder and CEO; and Radiants' Chief Financial Officer, Todd Macomber, will discuss financial results for the company's third fiscal quarter and 9 months ended March 31, 2019.

Following their comments, we will open the call to questions. This conference is scheduled for 30 minutes. This conference call may include forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. these future on events. based and current has about projections company forward-looking its statements expectations The that company's These and be expressed and company or unknown statements materially risks, cause forward-looking are results such uncertainties assumptions subject different from implied about or achievements by results or actual to the known may to the achievements the statements. forward-looking

Radiant's forth actual materially impossible factors at such those that future the may company's set announcements, company's and the website the from statements, to differ may SEC in in to all results other our www.radiantdelivers.com. public identify is are achievements factors it that which on While the or forward-looking have the in those past filings identified cause include be in or available

indication results performance. past are future an necessarily not of addition, In

Now the I'd Radiant's CEO, Bohn over founder and to like turn Crain. call to

Bohn Crain

you, or of Thank for million, We're $X.X million cash period. you flows. joining by XXXX, strong to highlighted XX.X% revenues for call. in expansion quarter record the everyone, along prior million, today's up for $XXX comparable up revenue the results March X%. saw year Net record $X.X XXX with March XX, the on report or of our with thank good continued also basis We afternoon, margin quarter points ended revenues results quarter third to for of X.X%. million net pleased up and And $XX.X margins posted from XX.X% another

shareholders comparable and or up of million, $X.X period. million also million, XX.X% $X.X to adjusted shareholders income million, year $X.X of net $X.X over up up to common million; attributable XXX.X%, net $X.X adjusted the common or We $X.X prior attributable million EBITDA reported income of

net for year XXX period. In million addition, $XX.X were prior or XX.X%. X.X% $XX.X reported $XX.X of U.S. in XX% for we or of from million $X.X revenues $X.X which over improvement added XX.X% saw net or million up adjusted points and were over of the increased X.X% In million services our the comparable year prior In period. X.X% year year $X.X net the $X.X reported X.X% $XXX.X million, prior million, year revenues we million XX.X% or of revenues Canada's million period. the or the up a margins, to million $X.X Canada, million for up U.S. basis comparable prior up X.X% record and revenues revenues U.S., EBITDA revenues up period. $X.X revenues transportation period. valued of million, X.X%, net the prior $X.X X.X% also we were comparable of million comparable or up of up net or comparable $X.X transportation

business cash ended in Canada's operations or X for $X.X The and 'XX strong revenues million generating million March While of up cash XX.X%. XX, was the continues March services $XX.X deliver for the million months in from generating million flows to value $X.X added XX. $XX.X net operations X also months cash from ended

$XX.X And history. On our stock of preferred than company's of turn trailing through we less of in as company's the and debt drawn short, million approximately the 'XX, $XX.X $XX XX down debt the had XX best million, a month on March Having continued total the million the adjusted of million. EBITDA is net which of of quarter, financial to $XX December, in adjusted facility. we position end month are We XX we the million $XX.X in pay EBITDA. approximately retired trailing in credit basis generated X

we organic turn we operating With support up of in which further Todd agent-based end a growth Financial multi-brand low it market financial technology to in freight over leverage combination some will and us and our it and us sheet to first in to now profitable meaningful customers value acquisition our ongoing partners consolidating I'll marketplace. for unique serve. Officer, growth, in networks, walk Our well time, the over balance that, and strategy our consolidation through through on long-term position deliver investment our the believe, deliver puts that our advantage continue strategy to to We results, forwarding Macomber, remain shareholders, for more Chief our open our to committed to than executing XX-year Q&A. detailed in then a

Todd Macomber

and EBITDA we Thanks, Bohn. discussing XXXX. months be Today including income the ended our X X March Good afternoon, XX, results, for adjusted will everyone. net and financial adjusted

XX, For or the revenues share, $XXX $X.XX diluted income of ended $XXX,XXX gain change fully and per on $X.XXX consideration. a stockholders common to months including allocable on contingent March million basic in of net X XXXX, reported we million

fully of allocable For the or months of XX,XXXX, per and reported stockholders March common to comparable year X we diluted prior represents increase net This $X.XX million approximately over share. period $XXX.X ended the million an basic of income revenues or on X,XXX.X%. $X.XXX $XXX,XXX

net For common reported XXXX, XX, income the adjusted months stockholders ended of to X $X.XXX attributable we March million.

represents months EBITDA March XXXX. months or We million X million XX,XXXX. income $X.XXX attributable For XXXX common the $X.XXX ended adjusted for or XX, of $X.XXX increase for ended approximately reported of the adjusted the increase X EBITDA million of compared of XX, an to approximately of adjusted approximately stockholders This months an approximately This represents net March to We reported ended $X.XXX XXX%. $X.XXX March XX.X%. million. million X

Moving X along month to results. the

months of basic including share, per on For X of $X.XX per net in change million XXXX, consideration. XX, contingent the or revenues $X.XX gain fully on common stockholders million $X.XXX diluted million and we reported a to $XXX.X March ended income $X.XXX allocable

year to prior period comparable of March months per X basic revenues ended This fully approximately the of For or $XXX.X XXX.X%. an XXXX, diluted on million or represents million over we income and increase allocable net of XX, $X.XXX million reported common stockholders share. $X.XXX $X.XX the

to $XX.XXX million. XXXX, the adjusted income months March For attributable stockholders of XX, ended X net common we reported

XXXX the an $X.XXX approximately XX, March EBITDA months for XX, XX, compared I an we our the turn of back million from net million. to XXX%. $XX.XXX stockholders XXXX. income ended $XX.XXX This months for or XXXX, EBITDA X to over approximately attributable ended $XX.XXX moderator ended adjusted will of that, any common reported adjusted million adjusted of March the facilitate increase of to approximately For represents We X With March This the million reported of $X.XXX approximately X increase callers. to months represents Q&A or XX.X%. call our

Operator

Kevin Securities. Global Sterling [Operator Seaport Instructions] from is of Question coming

Kevin Sterling

of - we keep was I records. so keep lot Congratulations, records but a congrats. I quarter hearing keep lot of there repeating, About last a

So we the let I'm cash record. operating not about quarter with mistaken cash in how should that me generation your flow start the a there? free Could your But think because quarter? you flow us is in help if

Bohn Crain

numbers] to Sure. him [through the walk ? want Todd you

Todd Macomber

Sure.

quarter, months flows For the we operating for $X.X $XX.X investments the had our of - million, and X about cash million. was

the cash quarter free million. for $XX.X So about - the was was overall,

Bohn Crain

It very was good a quarter.

Kevin Sterling

Wow.

that could be a record well. think I as

So congrats on that.

we the And this leveraging, so all how along should pipeline? about you obviously those and lines cash M&A guys generating with are think you're

Todd Macomber

be efforts, for - continue fully - disciplined things are - out integration to for intermodal We're M&A And good out who and across company-owned an of open a looking that more actively opportunities in we Toronto. store. we Agent of of with then, here thematics while of trail and starting of competing folks, the expressed, intending talked being not converted different categories. might our the and opportunities agent we stations and opportunities to and for we we ultimately, is would view to meeting expect effect then our and X that existing M&A to as acquisition our operations sense U.S. on approach. prior being extent each out to become liquidity, functional our on increasingly in business. what as with the freight-forwarding we consistently in active. we've interest us those looking as it's are we on similar view to done, we brokerage as Bellevue that we of platforms Yes, markets. also traditional could a Canadian to networks historically. or there be time one then or from been type of in ultimate centric as are about Well, that looking And really And truck categories areas, they they could that networks looking There's in And kind conversion would've get say, stations support to we to about We've support be of have could calls, to in on for talked number well those do actively continue available their ourselves trying right the become able which the expect it Chicago. - out the fair get make that that all frame, scale, that. kind when as platforms, at historically. them larger other of out having to to then And supported liquidity we existing then

Kevin Sterling

So a is you've months than in say, little sound bit time it's to situation you're hard that like it's were, of a the this you all platform, I summarize, closer you're to and got you ago. have problem where to cash. know X got I think the - but cash, - you may kind it good

acquisitions, what else would you're do the generating? have. a with the If cash good you you do Obviously to problem don't all it's

Bohn Crain

historically would some million I the preferred, remain of in any Ultimately, nothing, our we're was other right? businesses So freed I which of have at of we the pay tell Well, a don't retired - expensive additional multiple. you, can don't awarded down and being dividends. the of we'll flow we structure viable most capital Yes, the know obviously, in reminder, terms $XX our a That time. - out recently, stock as absolutely. debt, cash doing to up certainly process component the option. I trading marketplace, at continuing EBITDA buybacks -

to in meaningful are I and where the trade transactions the of marketplace done discount a to at scale. comps think continue we being

things: don't means, look that time, word, do then prepared well. as a smaller we opportunities came of along tuck-in because to to continue is we would kind while about higher serially tuck-in are market tradeoffs would the transactions, value that to context we'll One, if up but those of kind same we're, compelling a create of the continue of felt we do size of of as types we that, that can we acquisitions we shareholder smaller of, necessarily if couple I think the up, those. if And we the larger be for multiple know in talked the doing to part try paying certainly acquisitions ultimately, we've content of right we're but move was those a So progress always at terms within right really opportunity against lot the

than So got paying - more lots down - flexibility debt have. we ever financial of

this you out were at a the kind bit, well least also laying As out Kevin, shelf of little as that's effective. should the that we've got identify we

lot a us tools have of of our power, available run TTM business. really a we cash to rate for truly record what flows So free is with earnings

Kevin Sterling

Yes, no, totally long such never a seen strong guys I understood. time. you a mean, you in following financial position. I've I've been

congrats. So

that The your is me, other jumped Bohn, margin out thing at expansion.

of took market. particularly that? - better? capacity think buying of little you advantage opportunistic function a guys about Or bit the softness Is the more combination in a some in both. of side. that should and on and a you it's there maybe Or scale How out of were revenue we your and Your loose the maybe capacity your the quarter net

Bohn Crain

think function think gross and scale think about about combination it's we context good in I there movement when our more well. of scale, a the margin, manifesting wouldn't as I a of so as Well, - saw EBITDA itself I

the scale numbers business. when that's continue reflect So to our think we ultimately as scale I of I that business where think will the about math

out call the size, our where networks we based the on to can and in think far what one about curve buy are our there frontier largest of freight-forwarding of As relative purchase relative terms - in are expansion, I'll we're transportation out Asia transportation we peers. capacity margin we and efficient pretty

quarter the we're business modality - gross particular is are and of So a I think the the kind that this of of characteristics what business of our we are that one selectiveness of and in you're types the of recent terms this terms we function margin so things business are in serving of through of that quarter, mix pursuing. in more and customers most showed seeing of some in

of some business doing And customers had to high us so more. grade value opportunity business our an that and we've focus on with

in and that margin areas around can Canada, our logistics where of through proposition strategy as a I warehouse. added what and enhance driving example, these is been think value business we bundling bundling of the really able accomplish we've an the value the to solutions shows by one the characteristics inside where

Kevin Sterling

make to That good are some And last could may not March and you sense. at maybe about? you. that last for but comparison, Got in April question seeing talked be trends you're that expansion sequentially? we of touch what of kind me, compare the maybe, seeing then a April, seeing market and And least still you're we on

Bohn Crain

get chunky and different - going you the I that's in of business I'll opportunity incremental had give the Well, think answer these of of comps say going harder some benefit in you're our the to We may good had take a to pieces have I of onboard that slightly forward. opportunity that than some year but question. past expecting, a good quarters. quarter the last to some are

And of so - kind that's a had comp our in of terms relatively easy quarter what basis. last we

the the can't terms you the the harder trends I have strategy that higher the working tell out margin continuing But I get vertical comps very able to business. So to results, EBITDA continue next certainly us grow we're quarter. - growth the another in kind happy to adjusted we of but that The of think forward going to XX% are going get general harder quarters. in nicely XX% new expect certainly, characteristics for the play and of is our from while we will to be prospective are holding will comps this But hard, in with trend with said, base. we're

Operator

is Mark Our of question Argento Street from capital Lake next coming markets.

Mark Argento

update guys done, bit little time I types running paying last then more, higher. Maybe in, work have maybe was a of down the where us checked an we even of opportunity XX%? to just well. services the volume you How have talk wanted on value Maybe that. some off through a you are little providing. you you the seeing added the on SAP? bit drill better integration obviously, Just guys about there, guys give those the much do could of wanted over understand to it And think you're opportunities,

Bohn Crain

that but to precise I'll response don't I continue we Sure. is increasing. a to have it percentage there tell you your question - to with,

add continue company-owned We to stores. more

the also We to continue are process. new or to beginning TM - onboard agency stations under

that. capabilities. So we we at I'm I continue And to the talking work least sure international spent what we kind at historically, or not not of recall, haven't about that time - was away spent

international busy on fall the So expect at terms we progress of of we've and good making functionality functionality been TM. we're the this within to activating work and that, international activate TM, kind in

really, fall, again, all now, done until later up work but open effectively then So of this onto kind onboarding to international services accelerate kind of TM transportation even to within we'll up functionality. been faster #X the soup we've be the nuts should we'll with have door doing and And the TM. on capabilities that that the of is we the able stations

Mark Argento

I in broader market? able we then market? just kind the but guys better to How or world growth the And growth to relative mean, comps I to the mentioned about peers be the how your rate slightly know grow get you line here, on be growth, thinking organic do organic say think than broader quickly about we should you tougher, - organic of should

Bohn Crain

our to XX% X% number. X% kind of business of EBITDA to The basis margin set to XX%. And organic X% and X% twice pre-M&A is terms gross margin a in dollars then to margin target about the gross X% on our try we've think the adjusted is the that growing to growing we the Yes. at that, way metrics. EBITDA a X% so gross at and and to

Operator

Our from Davis. Campbell Thompson, next question of coming is David

David Campbell

been revenues your for hard to have The company. estimate

way and December speaking, more Is is from I excellent is March was have expected. forward? that but You March a seasonally normal would in point? quarterly of down quite down adjusted seasonality - this going the is than growth quarter, December revenue for that had course, I - a mean then bit the quarter quarter stepping-off a a the year number

Bohn Crain

that so the dynamic Yes. Yes, But and prior And have on pulling is, out you're been, seasonally historically call margin higher-yielding in mix. of the then has like I selectively think the it it kind have certain your demarketed both is we we back on March characteristics accounts. Dave. comments, quarter, which of fair my is on of to of didn't One, comment. business, you sides focused then slowest some

sent some I tradeoff seen So of as the describe that metrics a is bit sharpened kind of - our number it. kind now those But we we've accounts in think of you pencils of I little we've - around we've think serving. were a the as of contributions the

is work project, and meaningful I kind recall a of would to from one-off any be work kind think this base a because don't I positive. in this good a quarter us the having of to - variable that

to work think slowest I quarter. is the a from, conservative seasonally for this base

David Campbell

Right, right.

the a you'll had year. from seasonal significant increase to have is that quarter, year same you assume June increase, which June March last some So and in this of I

Bohn Crain

hope that's and Well correct. to. we Yes, would expect certainly

David Campbell

Right.

unusual, be causing unusual late. that in revenues nothing losses the so would it's be no the So March to quarter

Bohn Crain

No.

David Campbell

focus the on that churn is more business right? to to is Just accounts, profitable

Bohn Crain

correct. That's

Operator

Loop is Kauffman Jeff of from Our coming next question Capital.

Jeffrey Kauffman

all for one records. DJ here, Bohn the Quick spinning

growth, a - XX% growth fourth top of slowed some quarter, much understand, but you things how figure business So said And X% I'm quarter it seasonal? And coming trying to are more growth are Could help with that that know line I out deemphasizing? more us this versus help how to dramatically quarter. line that of kind comps a be disaggregate first me rate? are and took because what tougher Growths might of things of a trend demarketed pretty a slow down from organic How top XX% much is you much off you secular? kind we're me business. is you're getting

Bohn Crain

folks be bring That's want we've call I would the that what I X-K disclosure to things beyond calls in me getting scope from line. and the issue of and another to to No, in done create some can't. complications, here don't asking

know will this that segment - already, filed where Q it out U.S. delineate the you'll it's where I and later So able out if and and kind of be attributed played those how and in to was afternoon, be not between reporting, things Canada those to.

Jeffrey Kauffman

want up cash free of a you've then And follow Kevin's Okay. you're be enviable again, got I because to to with but position very a in careful then lot cash. question

for the little the talked You in opportunity a right waiting about bit market.

some I the make in to about strategic technology market look we things don't talked sense are road guess, now side to are that the And globally. on might You take makes make there that have to Where that of that information down and that rollout? sense investments have you advantage you the might investment?

Bohn Crain

infrastructure we I a I full expand and towards I already suite. out have scale and that can have. our mean out that that if always we're pretty get right density the of will, you that's we is leverage my not, But - can focus in places further we candidly more We can of we we'll where something and now, look - the mean at. -

other cost-synergy obvious costs characterize capture equally infrastructure we is what time, redundant But but to less node we at point was I'll level networks, office, able the I'll interesting obvious out were acquired is that what so as of thematic the And opportunities as and kind of agent-based network. synergize. a have there over back

everything opportunity you the we other would everyone mini smaller those and think be one candidly has their about There's even field, will, an in doing of their So at tuck-in company XX support plus-or-minus what various, types own we to you now would receptionist. as entrepreneurs type our and acquisitions. logistics has transactions. represents platform, at everyone tuck-in as those own stores smaller look look But these owned out facility, a if each opportunities, when type of X of

help a very continue So network. allocating that's very build us. represents to interesting outstanding The continues has will we team an for as term remain actively play that and area up to although, opportunity Historically, the I a very out putting to be grow us do we job, use to do, - That think and could dabble, interesting area about team more engaged that Canada that solidify and of there underneath they're and an also a as have we capital, e-commerce. pursuit. we comfortable do I'll opportunities. We we in feel those e-commerce the we're in. dabble haven't capital support another big don't

those of are lots the of certainly out others. There's and Session Q&A End we're opportunity there So looking.

Operator

time this like remarks. over I'd and closing At for additional to call any turn to back the management

Bohn Crain

you. All right. Thank

and by prospects platform Let we've with very at saying growth here bullish our remain we business model. progress we me our nonasset-based scalability and created the Radiant, that the close of that on remain excited very and

sheet advantage and term on puts represents unique invest a Our larger leverage balance strategy now than towards longer technology continue consolidating an us XX and We back support our much multi-brand and building technology position our freight-forwarding year investment consolidation. office in a people our scalable almost for eye in out in ongoing we opportunity, networks, infrastructure based and to more agent believe executing low in to first-to-market enterprise. and our with this perpetual world-class further a

partners and this believe meaningful Radiant Thanks patiently and are listening which shareholders, your support we long-term our that end pursuit of the We the customers in over for vision, for to we continue in time serve. will our value operating deliver Logistics. persistent

Radiant Logistics (RLGT) 12 May 192019 Q3 Earnings call transcript